Full disclosure: I'm a serious Jacob apologist, so, if you are determined to hate him or see him as the bad guy, you probably aren't going to like what I have to say... but, if you're on the fence or curious for his motivations, here's my take on it... parts of this are lifted from a post on Lostpedia Forums where I tried to sum up threads and threads of discussion on the matter.
1)
MIB was not evil as a man, he was just a smart, curious and creative guy who saw through his mom's craziness but had to live with people who didn't know him and with whom he didn't connect - yet he believed he could find it, that there was a 'home' somewhere for him. Jacob was more naive and frightened of things he didn't understand (like his brother's claims) so he opted to stay with the only one he'd ever known - fake mom and the island was his home.
2)
Jacob was not stupid before he became protector, as evidenced by him watching to see if mother was right rather than taking her or his brother's word for it. He loved his brother as we see them having friendly visits with MIB.
2) When fake mom does her job in a horrific, crazy way, and then forces her job on Jacob, she does it without giving him any instructions except vague explanation of what the Light is.
Jacob does not become all knowing and all powerful, he doesn't know what she did to his brother or their people, he doesn't know his brother's intentions - he knows there's a storm and he's going to get fire wood. Jacob has to figure EVERYTHING out. So, the mistake he makes in a fit of rage when MIB exacts the only justice there is on the island (I contend he was not evil before he was smoked), is done without knowing what will happen.
3) MIB's body/matter was destroyed, but his spirit was trapped on the island (rules of mom or Source phenomena) and contaminated by the 'sickness'. However, because of what happened to him, unlike those who are still alive, he no longer had that Light 'that is inside everyone' to fight against the evil - like Sayid and Claire did. In essence,
at the moment of smokification, MIB became infected with the evil and impossible to cure/redeem and worse, a carrier of the sickness of evil that can infect others.
MIB had to know his physical form had changed, however, he likely didn't feel like a different person but
MIB's personality didn't change. He didn't see his actions as any different either - people were still a means to an end, he still wanted off the island, he still believed people were not good, the only difference is, he had lost his light/conscience and ability to ever be convinced otherwise.
4) It probably took Jacob a while to figure out what had happened to his brother both
a) that the smoke was his brother and
b) that as Smokey he wasn't just angry about being killed, losing his humanity and not being able to leave, but Jacob probably had to learn that his brother had also lost that Light inside of him, and was not redeemable
All the show gave us is that somehow Jacob knew - I contend he had to figure it out and in my fan fiction
"Being Protector" it was a painful, soul searching experience for Jacob and deep down, just like with Ben, he hoped he was wrong about his brother - but had to plan for if he wasn't.
Most people who don't like Jacob imagine he never even tried, but that doesn't fit with the Jacob I saw on the show. He believed in the worst of the worst - Sayid, for crying out loud... why would he not also believe in his own brother whom he loved and whom he regretted hurting and who wasn't really a bad guy at all before he got smoked?
5) I believe
Jacob had several reasons for bringing people to the island and they all have to do with his fundamental question of proving there is good in people.
a) Proving his brother wrong wasn't just an 'in your face' game, I believe
Jacob was trying to redeem his brother, if it was possible, and thought that by convincing him people had good in them maybe some day his smoked brother would somehow believe there was still good in himself as well.
b)
Jacob was trying to help people that the island showed to him. Somehow, either through visions or the lighthouse Jacob did learn to see people off the island - he saw they were flawed, like him, that they were suffering, he saw their past and maybe even their potential future. He likely saw also that the island could help them heal. His question to himself would be - should he let them suffer off the island, or risk bringing them to the island where they could start over and heal.
Jacob believed if given a second chance, people had good in them and could come out of the dark places of their situations. The island would help convince those people of the goodness, if those people let it.
c)
Jacob needed to find replacements for himself and he had to test them to see what kind of person could handle the job of protector. The most important job requirement in his mind was knowing good without having to be told. Many people interpret what he told Richard as some sort of sick ignore people who need his help - as if Jacob was God. But what Jacob says is that, if he has to tell them what to do, '
it was pointless' Does that mean the game is pointless? No. I think it means he needed a successor who could carry on without him after he was gone. Someone who would be able to survive the island, his brother, know people were worth saving and figure out the right thing to do in difficult circumstances without having to be told.
I don't think Jacob was all good - I think he was flawed. But I think the key difference in Lost about the two sides isn't about being good or being evil.... not even doing good or doing evil.
It's about what are you trying to do, even if you fail, even if you think you're a terrible person or if you'll lose everything, do you still have a bit of light inside of you?
Ilana is another key element to understanding Jacob - the closest person to him we ever get to see ends up forgiving the one who killed him? That speaks volumes not just for who she was, but for who Jacob must have been to inspire not just loyalty, but loyalty to his values.
The thing I loved most about what Lost did with it's main characters is it took flawed, self-loathing people who were lonely and had nobody - and it gave them each other, something to believe in, something worth fighting and worthy dying for... and it brought us along with it.
The mythology of Jacob, as I see it, is - that was his plan.
And sometimes people need someone to believe in them in order to believe in themselves.